Information and consultation bill adopted
In April 2006, the Polish parliament finally adopted new legislation on information and consultation procedures in the workplace. The new law will effectively lead to the establishment of works councils in enterprises with at least 50 employees. In enterprises where representative trade union organisations exist, works councils will be controlled by the unions.
After a lengthy period of negotiations, the legislative act on employee information and consultation was finally adopted by the Polish parliament in early April 2006. The act incorporates the provisions of EU Directive 2002/14/EC establishing a general framework for informing and consulting employees.
In October 2005, the government presented a draft bill to the parliament. After much discussion in the parliamentary committees, a thoroughly reworked act was successfully passed by the lower chamber of the Polish parliament (Sejm) on 7 April 2006. Subsequently, the act was handed over to the upper chamber of parliament (Senat) (PL0603029I) and a number of amendments were introduced, most of which met with the Sejm’s approval in the next step of the legislative process. On 27 April 2006, the President of Poland, Lech Kaczynski, endorsed the new law.
Provisions of new act
The main provisions of the act are as follows:
- the establishment of works councils is mandatory for all enterprises with at least 50 employees;
- entities of a non-economic nature (such as public administration, schools, etc), as well as state-owned enterprises, enterprises of mixed ownership (partially state-controlled) and national film institutions, are all excluded from the legal regime of the act. Enterprises of those types are bound by separate legislation stipulating the existence of a council of employees;
- the works council serves as a collective representation of employees, with a right to information (defined as the transmission of data from the employer to the employee representatives to enable them to acquaint themselves with the subject matter and to examine it) and consultation (defined as the exchange of views and establishment of dialogue between the employee representatives and the employer);
- the quantity of seats in works councils depends on the number of staff employed: three seats in enterprises with 50 to 250 employees; five seats in enterprises with 251 to 500 employees, and seven seats in enterprises with more than 500 employees;
- in enterprises with a trade union (as defined by the Labour Code, article 241–25a, paragraph 1), council members are appointed by the union’s board. Where there are two or more representative unions in an enterprise, the unions’ boards should select council members by mutual consent, provided that each of the unions is entitled to a minimum of one seat; however, it is also lawful for two or more unions to nominate a joint candidate;
- in enterprises with no trade union, council members are elected by a general ballot among the workforce, and any employee with the documented support of a minimum of 10 colleagues in enterprises employing less than 100 staff, or 20 colleagues in enterprises with 100 or more staff, is eligible to run for election;
- in the case of a trade union establishing itself in an enterprise where no such union previously existed, a council elected by a general ballot of the workforce is requested to step down within six months, and a new council is to be appointed by the union’s board;
- the cost of works councils’ operations in enterprises with trade unions is covered by the unions, while, in enterprises without unions, the work councils are to be financed by the employers;
- enterprises employing at least 100 staff have to comply with the legislation from 25 May 2006: in such workplaces, elections should take place no later than on 25 November 2006; the remaining enterprises (50-99 staff) have to comply with the legislation from 24 March 2008, which means elections should be held no later than 23 September 2008.
Controversy over new act
As mentioned above, it took a substantial amount of time in the legislative process before a final draft of the new act was drawn up. It was evident that the social partners were struggling to reach consensus on the content of the act (PL0409102F). Major controversy continues to centre around the position of works councils and the rules on the appointment of council members. On the one hand, concern has been expressed over the fact that works councils might end up without sufficient scope to exert their powers, in order to represent employee interests effectively. On the other hand, fears have been voiced that works councils might become a ‘safe haven’ for less productive union officials.
Moreover, the social partners could not reach agreement on whether to adopt the so-called ‘Czech model’, in which works councils are established in unionised enterprises only, or come to an alternative arrangement. While trade unions favoured the Czech model, the employers opted for the concept of autonomous agreements between unions and employers. In the end, the unions’ preferences prevailed. The employers, however, expressed their criticism regarding the new legislation.
Opposition from employers
The most vocal opposition to the new law has come from the Confederation of Polish Employers (Konfederacja Pracodawców Polskich, KPP), which has threatened to bring a complaint before the Constitutional Tribunal (Trybunal Konstytucyjny, TK). The confederation claims that the new act does not fulfil the basic objectives of the directive, which is aimed at fully integrating employees into the industrial relations dialogue and at establishing a genuine dialogue between employers and their workers.
In addition, many employers state that they will do all in their powers to obtain an exemption from the act. Their dissatisfaction has mainly to do with two provisions of the new law. First, they criticise the fact that, in the case of works councils being appointed by the employees themselves, the employers will have to fund the establishment and operation of the works council; it is expected that this will mostly be the case. Second, they contest the bill’s provision that offers greater job security to works council members – employee representatives cannot be made redundant without the consent of the works council. Apart from a few exceptional circumstances, the works council’s consent is also required in the case of a unilateral change of employment terms to the disadvantage of employee representatives.
Jan Czarzasty and Rafal Towalski, Institute of Public Affairs (ISP) and Warsaw School of Economics (SGH)